Highlights
Despite a headline 2.8 million barrel build in oil inventories for the April 6 week, supply in the petroleum sector is a little less heavy. At 365.2 million barrels, commercial oil supplies are in the upper limit of their average range which is less heavy than the prior week when supplies were above the upper limit. Big draws were posted for both gasoline inventories, down 4.3 million barrels, and distillate inventories, down 4.0 million. These draws reflect slowing output from refineries which, operating at a very moderate 83.8 percent of capacity in the week, are not being pushed by strong demand. Demand indications from the wholesale sector show steady weakness in gasoline, down a year-on-year 4.0 percent, but a bit of improvement for distillates where year-on-year demand nevertheless is still down 3.6 percent. The price of oil is on the rise following today's report.

As is evident from the chart, crude oil stocks can fluctuate dramatically over the year. When oil prices nearly reached $50 per barrel in August 2004, financial market players began to monitor crude oil inventories. It is not surprising to see sharp price hikes in crude oil when inventories are falling. Conversely, one would expect price declines when inventories are rising.Data Source: Haver Analytics